Editor’s note: Every Monday WRAL TechWire highlights a company or a trend or even advice that focuses on startups across the Triangle and North Carolina. This week we focus on what’s happening in the VC industry.
RESEARCH TRIANGLE PARK – Venture capitalists say they are still writing checks and most saw their portfolio companies rebound from the pandemic slowdown by June.
Appearing at a virtual panel discussion during the Startup Summit, the panel featured David Gardner, Cofounders, moderator, Ellaine Bolle, RTP Capital, Keith Daniels, Resilient Ventures, Suresh Shanmugham, Saama Capital, Monique Villa from Mucker Capital Runs. They spoke after former Cisco CEO and Chair John Chambers – himself an investor – told participants to “dream bigger” even as COVID-19 drags on.
“We’re investing,” said Shanmugham of Saama Capital. “You have to look at where these companies will be in 3 to 5 years. We’re on track to do up to five investments this year. The firm generally does 4-5 investments a year. “There are plenty of opportunities we’ll continue to look at.”
“Our game is a long game,” Monique Villa from Mucker Capital said. “There is significant growth in certain categories, healthcare, shopping and financial services. We just signed a term sheet for an Atlanta company yesterday and made several investments since March.”
Ellaine Bolle of RTP Capital said many of her firm’s investments from March through August have been follow-on deals. “There’s more appetite for follow-on to help companies ride out COVID. But all of our companies are operating and people do see longterm opportunities.”
She adds, “Entrepreneurs are afraid the money is not there. But we’re screening 30 to 40 companies a month. We look for a little more traction. It doesn’t have to be revenue.” She pointed out that the pandemic helped some firms manage cash better because they’re doing everything virtually and have eliminated travel expenses.
Keith Daniels of Resilient Ventures said, “We’re sticking to our game plan. We are trying to understand the larger market segment reality.” He admits, however, “We had to question our field of founders, their resilience in the pandemic and how it will affect their business proposition. But our name is Resilient Ventures. At the end of the day it’s about finding the right people and riding out the storm.”
“The capital is there, Shanmugham said. “There is plenty of liquidity in the market. All of us have been setting a fairly steady pace writing checks. It is harder when you can’t meet people in person. You need much greater confidence that they can build something of consequence.”
“Our companies rebounded by June,” Villa said. “Some companies are accelerating. Traditional companies have to figure out how to do things online, so anything with working remotely is doing well. Healthcare because of limited in-person visits. Human Resources are skyrocketing. Real estate is another hot area. Houses are flyhing off the market. Overall, anything delivering value to the customer will do well in this time.”
“All of our consumer companies are doing well,” Shanmugham said. “They have bounced back in a very short period of time.”
Bolle perhaps summed up the sentiment among the investors best. “Success depends on entrepreneurs knowing how to respond to a changing environment and knowing how to adapt.”